Khan v Hitachi Energy Australia Pty Ltd

CERTIFICATE OF DETERMINATION OF MEMBER
CITATION:	Khan v Hitachi Energy Australia Pty Ltd [2025] NSWPIC 22
APPLICANT:	Sefal Khan
RESPONDENT:	Hitachi Energy Australia Pty Ltd
MEMBER:	John Isaksen
DATE OF DECISION:	28 January 2025
CATCHWORDS:	WORKERS COMPENSATION - Workers Compensation Act 1987; claim for weekly payments for about 18 weeks and medical expenses for psychological injury; claim for weekly payments restricted by the provisions of section 52; respondent concedes the worker sustained injury in the course of his employment but relies on section 11A that the injury was wholly or predominantly caused by reasonable action taken by the respondent with respect retrenchment and/or dismissal; consideration of Pirie v Franklins Ltd and Irwin v Director General of School Education; Held – the injury sustained by the worker was not wholly or predominantly caused by reasonable action taken by the respondent with respect to retrenchment and/or dismissal; award of weekly payments of compensation for closed period and the payment of the worker’s reasonably necessary medical treatment.
DETERMINATIONS MADE:	The Commission determines: 1. The respondent has failed to establish a defence pursuant to s 11A (1) of the Workers Compensation Act 1987 (the 1987 Act). The Commission orders: 2. The respondent is to pay weekly payments of compensation to the applicant pursuant to s 37 (1) of the 1987 Act as follows: (a) $2,423.60 per week from 3 February 2024 to 30 March 2024, and (b) $2,497.70 per week from 1 April 2024 to 9 June 2024. 3. The respondent is to pay the applicant’s reasonably necessary medical treatment for his psychological injury pursuant to s 60 of the 1987 Act.

STATEMENT OF REASONS

BACKGROUND

Sefal Khan, the applicant in these proceedings, claims that he sustained a psychological injury in the course of his employment with the respondent, Hitachi Energy Australia Pty Limited (Hitachi Energy), on 8 June 2023.
Mr Khan states that he felt helpless and sick in the stomach when he was informed by Jeremie Moules, the Chief Financial Officer for Hitachi, while they were together, on 8 June 2023 that Mr Khan’s last day of work with Hitachi would be on 31 December 2023. This was conveyed to Mr Khan while the two of them were drinking a coffee on George Street, Sydney. Mr Khan had been employed with Hitachi Energy for nearly 27 years.
Mr Khan ceased work on 8 June 2023, made a claim for workers compensation benefits, and was paid weekly payments of compensation until 2 February 2024.
EML on behalf of Hitachi Energy issued dispute notices on 18 January 2024, 20 February 2024 and 12 September 2024 wherein liability has been disputed on the grounds that the psychological injury sustained by Mr Khan was wholly or predominantly caused by reasonable action taken by Hitachi Energy with respect to retrenchment or dismissal (s 11A (1) of the Workers Compensation Act 1987 (the 1987 Act)).

ISSUES FOR DETERMINATION

The parties agree that the following issue remains in dispute:
(a) whether the psychological injury sustained by Mr Khan was wholly or predominantly caused by reasonable action taken or proposed to be taken by Hitachi Energy with respect to retrenchment or dismissal (s 11A (1) of the 1987 Act).

PROCEDURE BEFORE THE PERSONAL INJURY COMMISSION

The parties attended a conference and hearing on 23 January 2025. I have used my best endeavours in attempting to bring the parties to the dispute to a settlement acceptable to all of them. I am satisfied that the parties have had sufficient opportunity to explore settlement and that they have been unable to reach an agreed resolution of the dispute.
Mr Tanner appeared for Mr Khan, instructed by Mr Carden. Mr Gaitanis appeared for Hitachi Energy, instructed by Ms Gorry.
Hitachi Energy conceded that Mr Khan had sustained a psychological injury in the course of his employment. Hitachi Energy also conceded that if it was not successful in its defence of the claim pursuant to s 11A (1) of the 1987 Act, then Mr Khan would be entitled to the following award of weekly compensation:
(a) $2,423.60 per week from 3 February 2024 to 30 March 2024, and
(b) $2,497.70 per week from 1 April 2024 to 9 June 2024.
The parties agreed that Mr Khan’s entitlement to weekly payments of compensation ceased on 9 June 2024 due to the provisions of s 52 of the 1987 Act.
Mr Gaitanis confirmed that the only issue for determination before the Personal Injury Commission (Commission) was whether the psychological injury that was sustained by Mr Khan was wholly or predominantly caused by reasonable action taken by Hitachi Energy with respect to retrenchment or dismissal.

EVIDENCE

Documentary evidence

The following documents were in evidence before the Commission and considered in making this determination:
(a)    Application to Resolve a Dispute and attached documents;
(b)    Reply with attachments, and
(c)    Application to Lodge Additional Documents filed by the applicant on 17 January 2025.

Oral evidence

There was no application to adduce oral evidence, or cross examine Mr Khan or any other witnesses who have provided statements.

The applicant’s evidence

Mr Khan has provided a statement dated 27 June 2024.
Mr Khan states that he commenced employment with Hitachi Energy on 1 December 1996 and was employed as a Country Tax Manager for Australia and New Zealand.
Mr Khan states that he was asked by Jeremie Moules in June 2022 to put together some points of what Mr Khan’s future plans were with Hitachi Energy. He states that Mr Moules said that Mr Khan’s line manager, Ala Abu Awwad, would discuss those plans with Mr Khan at an upcoming tax conference in Dubai in September.
Mr Khan states that he had no formal meeting with Ala in Dubai, but he did have a quick chat with Ala and Ala’s manager, Christian Pfang. He states that he explained to them that he was not planning on leaving Hitachi Energy until he was at least 73 years of age. Mr Khan had just turned 66 years of age.
Mr Khan states that both Ala and Christian said that they were happy with his performance and that there were no issues whatsoever with the quality of his work. He states that Christian said that he knew that there was no retirement age in Australia, and that retirement cannot be forced in Australia because this amounts to age discrimination.
Mr Khan states that he did not hear anything further about his job between September 2022 and 8 June 2023.
Mr Khan states that on 8 June 2023 he was asked by Mr Moules if Mr Khan would grab a coffee with him as Mr Khan walked into the office. He states that he did not think twice about this because this occurred regularly when he attended the office on Thursday. He states that the two of them got a coffee from a coffee cart in George Street and that Mr Moules then asked that they go for a walk.
Mr Khan states: “Jeremie straight away said that my last day of work will be 31 December 2023 and I will not have a job after that.” He states that he asked Mr Moules if he was being made redundant, but Mr Moules provided no reply. Mr Khan states that he also received no answer to questions as to whether he was being replaced by someone else. He states that Mr Moules said that Mr Khan could come back on a contract for two days a week for a maximum of six months. He states that Mr Moules said Belinda Nicholson, the Human Resource (HR) manager, would call Mr Khan the following day.
Mr Khan states that he was suddenly shocked by no notice being given to him of this decision by Hitachi Energy. He states that he felt helpless and sick in the stomach. He states that there were lots of people on George Street while this discussion was occurring between himself and Mr Moules. Mr Khan states that he somehow controlled his emotions.
Mr Khan states that he was very anxious and was not able to concentrate when he returned to the office, and that he said to Mr Moules that he was going home because he did not feel very good.
Mr Khan states that he waited the next morning for a call from Ms Nicholson, but that call did not eventuate. He states that he attended a doctor that afternoon and was told by the doctor that he needed to take some time off work.
Mr Khan states that he has not returned to work because of his psychological injury. Mr Khan states:
“At no point in time prior to the discussion with Jeremie on George St did he, or Ala or Christian or Belinda indicate to me that I was going to be asked to leave. Jeremie did not set up a proper meeting with me or send me an agenda or ask if I wanted to have someone present. I felt humiliated and belittled and hard done by as Jeremie could not provide me with any explanation.”

The evidence from the respondent
Jeremie Moules

Jeremie Moules has provided a statement dated 13 July 2023.
Mr Moules states that he is employed as the Chief Financial Officer for Hitachi Energy. He states that Mr Khan has no direct reporting line to him, but instead Mr Khan reports to a tax manager based in Dubai.
Mr Moules states that work performance issues have been raised with Mr Khan “in the past and recently.” He states that Mr Khan’s performance in the last two years has been rated as average. He states that the quality of Mr Khan’s work was poor at the end of March 2023 and that other colleagues “had to step in to cover his work.” Mr Moules states that he had a face-to-face discussion with Mr Khan and provided examples of unsatisfactory performance and that he required improvement from Mr Khan within the next three months. However, Mr Moules also states that he had no knowledge of Mr Khan being subject to formal performance management prior to Mr Khan ceasing work.
Mr Moules states that in early June 2023 he entered into conversations with the Global Head of Tax and Mr Khan’s line manager in Dubai about organising the future of Hitachi Energy, and that this included discussing Mr Khan’s retirement plan. He states that he sought advice from Ms Nicholson on 5 May 2023 on how to progress discussions with Mr Khan regarding his retirement plan.
Mr Moules states that there was an agreement between himself and Ms Nicholson that Mr Khan would be offered six months payout in redundancy, and end date of employment of 31 December 2023, and the opportunity to work with Hitachi Energy for one to two days in consultancy for a maximum commitment of six months.
Mr Moules states that he met with Mr Khan on the morning of 8 June 2023 and thought that the discussion he had to have with Mr Khan would be easier over a coffee outside of the office. Mr Moules states that he said to Mr Khan that “we needed to have an uncomfortable discussion” and that Mr Khan merely understood this discussion was about his retirement from Hitachi Energy.
Mr Moules states that he provided information to Mr Khan regarding a “transition to retirement”. He states that he also provided a context for the decision which was being made by Hitachi Energy regarding Mr Khan’s employment which included probable re-organisation within Hitachi Energy and numerous challenges in the tax manager role which were going to become more stressful and complicated in both compliance and corporate tax outputs.
Mr Moules states that Mr Khan asked if he was being replaced with a “Swiss lady from Zürich”, and Mr Moules replied that no such offer had been made.
Mr Moules states that Mr Khan indicated that he wanted to have a discussion with HR. He states that Mr Khan was very stressed when they returned to the office, and he suggested that Mr Khan go home and rest for the day.
There is also an email from Mr Moules in evidence dated 16 June 2023 to various officers of Hitachi Energy, including Ms Nicholson and Ala Abu-Awad, which includes the following:
“Just spoke with our tax partner, unfortunately Sefal did not lodge some mandatory tax declarations in the ATO which means the Company might be exposed to penalties.”

Belinda Nicholson

Belinda Nicholson has provided a statement dated 12 July 2023. Ms Nicholson states that she is employed with Hitachi Energy as Country HR Manager.
Ms Nicholson states that she had no knowledge of Mr Khan being subject to formal performance management prior to him ceasing work with Hitachi Energy.
Ms Nicholson states that around 1 June 2023 she engaged with Mr Moules in a discussion regarding the global realignment of the finance department and the need to make Mr Khan’s position redundant. She states that she discussed with Mr Moules “the best practice around consultation and having a meeting with the claimant to discuss this and matter and options.”
Ms Nicholson understands that the date of injury recorded for Mr Khan’s 8 June 2023 and states: “I am aware that on this date Jeremie had an informal conversation with the claimant around best practice for the redundancy consultation process.”
Ms Nicholson states that Mr Moules provided her with an account of the meeting between himself and Mr Khan, and informed Ms Nicholson that Mr Khan was distressed about the package he was being offered and was encouraged to discuss these concerns with Ms Nicholson. She states that Mr Khan did not reach out to her, and she heard nothing from him.

Other evidence from the respondent

Clause 2.2.1 of the Employee Separation Policy from Hitachi Energy provides:
“Redundancy occurs Hitachi Energy determines that it no longer requires the job to be performed by the employee or anyone else, except where this is due to the ordinary and customary turnover of labour.”
Clause 2.2.2 of the Employee Separation Policy includes the following:
“Redundancy discussions and processes are initiated by Hitachi Energy based upon Hitachi Energy assessment of the ongoing operational needs of the business.
If this occurs, Hitachi Energy aims to consult with the affected employee(s) about their situation, including whether other suitable alternative roles may be available.”

A summary of the submissions from the parties to the dispute

Mr Gaitanis on behalf of Hitachi Energy submits that the action taken by Hitachi Energy with respect to retrenchment and/or dismissal was reasonable. He submits that there was reasonable action taken by Mr Moules by providing to Mr Khan the context whereby Mr Khan would no longer to be employed by Hitachi Energy.
Mr Gaitanis also submits that the procedure undertaken by Hitachi Energy to inform Mr Khan of his cessation of employment was reasonable. He submits that Hitachi Energy was endeavouring to be sensitive and take a pastoral approach in informing Mr Khan of this decision by Mr Moules inviting Mr Khan for a coffee, rather than engaging in a clinical, de-sensitised approach.
Mr Gaitanis also submits that the decision to end Mr Khan’s employment was against a background of poor performance by Mr Khan. He points out that Mr Khan does not provide a response to the evidence from Mr Moules that there was a face-to-face discussion between the two of them wherein Mr Moules required improvement from Mr Khan.
Mr Tanner on behalf of Mr Khan submits that the action taken by Hitachi Energy was not reasonable because Hitachi Energy does not provide any evidence, nor does it inform Mr Khan, of why Mr Khan’s position in the company would cease to exist or how Mr Khan would not fit into a new structure within the company.
Mr Tanner submits that it is apparent from the evidence that the real rationale for the termination of Mr Khan’s employment was his age, and that is not a category within s 11A (1) of the 1987 Act.
Mr Tanner also submits that the procedure undertaken on 8 June 2023 was not reasonable. The information that was conveyed to Mr Khan was on a public street, without Mr Khan having a support person. The purpose of the meeting was not to have a discussion regarding Mr Khan’s position in the company but simply to announce that Mr Khan’s employment would be terminated. Mr Tanner submits that what occurred on 8 June 2023 could hardly be regarded as “best practice for the redundancy consultation process” as claimed by Ms Nicholson.
Mr Tanner submits that the claim of poor performance by Mr Khan is no more than a retrospective attempt to justify the actions of Hitachi Energy. He points out that there is no evidence of any performance management plans, and there is no evidence from Ala and Christian to dispute Mr Khan’s evidence that they both said they were happy with his performance. Furthermore, the offer from Hitachi Energy that Mr Khan that could work a further six months on a consultancy basis runs counter to the claim that Mr Khan’s work performance had been poor.

DETERMINATION

Section 11A (1) of the 1987 Act provides:
“No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by, or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”
Hitachi Energy relies upon the categories of retrenchment and dismissal in s 11A (1).
In Manly Pacific International Hotel v Doyle [1999] NSWCA 465 (Doyle), Fitzgerald JA said of s 11A (1), with Mason P agreeing, at [27]:
“…the provision does not speak of an injury caused by the transfer, demotion, promotion, etc of a worker but of an injury caused by action taken or proposed to be taken by or on behalf of the employer with respect to such a matter. The words ‘performance approval, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers’ all clearly refer to matters other than the performance by a worker of his duties. The paragraph is thus looking to the worker's response to the employer's action or proposed action, not to the worker's response to employment conditions encountered after a transfer, demotion, promotion, etc. Senior counsel for Mr Doyle put the matter well when he submitted that the section was looking to the process of transfer, demotion, promotion etc rather than those acts per se.”
Mr Moules states that he provided a context for the decision which was being made by Hitachi Energy to end Mr Khan’s employment when he had a coffee with Mr Khan on 8 June 2023. However, his “context explanation” does not refer to why there was no longer going to be a job for Mr Khan with Hitachi Energy. The “context explanation” instead was in regard to probable re-organisation within Hitachi Energy and numerous challenges which Hitachi Energy anticipated in both compliance and corporate tax outputs. Mr Moules did not explain to Mr Khan why he could not be part of the probable re-organisation and why Mr Khan did not have the requisite skills, temperament and experience to meet the stressful and complicated challenges which was being anticipated by Hitachi Energy.
The Employee Separation Policy from Hitachi Energy provides that redundancy occurs when Hitachi Energy determines that it no longer requires a job to be performed by an employee or anyone else, except where this is due to the ordinary and customary turnover of labour. However, there is no evidence from Hitachi Energy that Mr Khan was informed of why he could no longer perform his job with Hitachi Energy.
There were no meetings or correspondence between Hitachi Energy and Mr Khan which are contemplated in Clause 2.2.2 of the Employee Separation Policy. Instead, the proposal delivered by Mr Moules to Mr Khan on 8 June 2023 was presented as a fait accompli.
In my view, the failure by Hitachi Energy to follow its own policy regarding the separation of Mr Khan from the company cannot be regarded as reasonable action.
I agree with the submission from Mr Tanner that a review of the evidence reveals that the reason for termination of Mr Khan’s employment was due to his age. This is readily apparent from the evidence from Mr Moules where he refers on several occasions in his statement to a “retirement plan” for Mr Khan.
The evidence does not disclose any genuine attempt by Mr Moules or Ms Nicholson to consider whether redundancy was justified. Instead, the available evidence reveals that the concept of redundancy was simply used as a mechanism for the termination of the employment of Mr Khan.

The circumstances whereby Mr Khan was informed of the termination of his employment also amounted to action that was not reasonable on the part of Hitachi Energy. Mr Khan was given no notice that the invitation by Mr Moules for a coffee was to be in regard to the loss of his job. Mr Khan’s statement that he did not hear anything further about his job between the meeting with Ala and Christian in Dubai in September 2022 and 8 June 2023 is not challenged by any evidence from Hitachi Energy. It is therefore logical and reasonable that Mr Khan experienced a profound sense of shock, which was accompanied by some feelings of nausea, when he was told by Mr Moules that his employment with Hitachi Energy would cease at the end of that year.
In Pirie v Franklins Ltd [2001] NSWCC 167; 22 NSWCCR 346 (Pirie), Neilson J found that the worker having “absolutely no knowledge of the retrenchment” (at [57]) and the suddenness “of the axe that fell upon the applicant” (at [59]) to be two of several factors which amounted to action that was not reasonable on the part of the employer (at [50]). Although caution needs to be exercised when drawing comparisons from different factual circumstances, Mr Khan experienced a similar lack of notice and a similar suddenness in the news of the termination of his employment as occurred in Pirie, and which led Neilson J in that dispute to reject the s 11A defence pursued by the employer.
Mr Tanner also referred to a lack of notice regarding a transfer that was found not to be reasonable action taken by the employer in BlueScope Steel Ltd v Markovski [2013] NSWWCCPD 60 (Markovski) at [195], and a transfer being communicated as a fait accompli found not to be reasonable action taken by the employer in Jones v Department of Juvenile Justice (decision of Arbitrator Virtue, No.7015/11 dated 22 December 2011).
There were no minutes taken of the meeting between Mr Moules and Mr Khan on 8 June 2023. There was no support person available for Mr Khan when Mr Moules knew that he would telling Mr Khan that he was going to be dismissed. Mr Moules concedes that Mr Khan had no direct reporting line to him, yet no attempt was made to have an immediate supervisor for Mr Khan present while the discussion occurred.
Mr Khan was informed of the termination of his employment in a busy public street. I accept that was an aggravating factor to the shock which was experienced by Mr Khan because he states that he “somehow controlled my emotions” while standing on George Street.
It really defies belief that the circumstances whereby Mr Khan was informed of the termination of his employment could be regarded by Ms Nicholson in her role as HR manager to be the “best practice for the redundancy consultation process.”
Mr Gaitanis refers to the statement of President Phillips in Van Vliet v Landscape Enterprises Pty Ltd [2022] NSWWCCPD 49 (Van Vliet) at [179] that: “the reasonableness in s 11A (1) does not, with respect, require a counsel of perfection”. However, the public setting of where that news was delivered to Mr Khan, the informal manner of that meeting, the suddenness of the news imparted to Mr Khan, and the lack of a support person, all amount to actions that cannot be regarded as reasonable on the part of Hitachi Energy, and which were contrary to its own policy “to consult with the affected employee.”
In Irwin v Director General of School Education, NSWCC no.14068/97 (18 June 1998, unreported) (Irwin), Geraghty CCJ said:
“The test of reasonableness is one of fact, weighing all the relevant factors. The test is less demanding than the test of necessity, but more demanding than the test of convenience. The test of ‘reasonableness’ is objective, and must weigh the rights of employees against the objective of an employer. Whether an action is reasonable should be attended, in all the circumstances, by a question of fairness.”
Although Hitachi Energy had made a business decision that they no longer wanted to employ Mr Khan, that decision must be weighed against the rights of an employee who had given almost three decades of service to Hitachi Energy. The specific actions which I have referred to and which occurred at the meeting between Mr Moules and Mr Khan on 8 June 2023 cannot on any objective view be regarded as being fair to Mr Khan.
Mr Gaitanis submits that Mr Khan does not provide a response to the evidence from Mr Moules that there was a face-to-face discussion between the two of them wherein Mr Moules required improvement from Mr Khan, which would allow for a conclusion to be reached that Mr Khan was the subject of performance oversight prior to June 2023. There is also the email from Mr Moules eight days after Mr Khan ceases work which refers to the failure by Mr Khan to lodge some mandatory tax declarations.
However, I do not accept that alleged poor work performance by Mr Khan was the basis for reasonable action to be taken by Hitachi Energy to dismiss Mr Khan when all of the available evidence is considered.
Firstly, poor work performance was not given as a reason by Mr Moules for the termination of Mr Khan’s employment when they went for coffee on 8 June 2023.
Secondly, there is no evidence of any performance management plans being implemented by Hitachi Energy, and Mr Moules and Ms Nicholson both concede they had no knowledge of Mr Khan being subject to formal performance management before he ceased work.
Thirdly, there is no evidence from Ala and Christian to dispute Mr Khan’s evidence that they both said they were happy with his performance.
Fourthly, I agree with the submission made by Mr Tanner that it is disingenuous for Hitachi Energy to allege poor work performance when the terms surrounding the termination of Mr Khan’s employment included an offer to work for one to two days per week on a consultancy basis for a period of six months after he had been dismissed.
Fifthly, there is no evidence from other colleagues who “had to step in to cover his work” for what is a serious allegation to be made regarding a man who had worked for almost three decades with Hitachi Energy
Finally, a reasonable inference can be made that Mr Khan was a competent and valued employee of Hitachi Energy given the amount of service he had provided for that company.
The evidence which I have referred to weighs in favour of a finding that Mr Khan’s work performance with Hitachi Energy was satisfactory and that poor work performance was not a reason for action to be taken by Hitachi Energy to dismiss Mr Khan.

SUMMARY

Hitachi Energy has failed to establish a s 11A defence because the action taken by them with respect to retrenchment and dismissal was not reasonable.
There will be an award of weekly payments of compensation for the period from 3 February 2024 to 9 June 2024 at the rates agreed to by the parties.
A claim for s 60 expenses is made in the ARD, although neither counsel addressed that claim during the hearing. Given that the dispute was based on s 11A (1) of the 1987 Act and there was no dispute that Mr Khan had sustained a psychological injury in the course of his employment with Hitachi Energy, the appropriate order is for Hitachi Energy to pay Mr Khan’s reasonably necessary medical treatment for his psychological injury pursuant to s 60 of the 1987 Act.

[2025] NSWPIC 22

28 January 2025